BOSTON — A controversial program that doles out tens of millions of dollars each year in tax credits for movie studios will continue indefinitely after Gov. Charlie Baker signed off on plans to make it permanent.
Tucked into an outside section of the $48.1 billion budget Baker approved on Friday is a provision extending the film tax credit beyond its January 2023 expiration.
Supporters of the tax credits say they create thousands of jobs and support a small but thriving movie industry, and they praised Baker and legislative leaders for making the subsidy permanent.
The Massachusetts Film Production Coalition said the move ensures that “thousands of families and small business that depend of the growing film and television industry can continue to live and work in Massachusetts.”
“The production tax credit has successfully created a vibrant film industry in Massachusetts that is recognized as one of the best in the world,” the group said in a statement. “Massachusetts is now positioned to capture a major portion of the jobs and revenue created by the new productions planned in the post-pandemic entertainment industry.”
A perennial battle over film tax credits on Beacon Hill pitted those supporters with others who sought to scale back or eliminate the subsidies.
During his first term, Baker, a Swampscott Republican, pushed to scrap or scale back the subsidy, arguing that it did little for the state economy. The Democratic-controlled Legislature blocked his efforts.
To be sure, opponents of the tax credit have filed bills for the upcoming session to cap the subsidies or end the program ahead of its 2023 expiration date.
The tax credit program offers a subsidy equal to 25% of a movie or TV show’s production costs — including set construction, wages, security, food and other expenses. There’s no cap on the credits, which can be used up to five years after being issued. Credits may also be sold, transferred to another studio or cashed in by production studios.
Under the law, production studios can also get an exemption from the state’s 6.25% sales tax.
Since 2006, the state has doled out more than $550 million in film tax credits for major Hollywood hits such as “The Town” and “Godzilla: King of the Monsters.”
In 2019, it awarded more than $77 million in credits to 179 productions, according to the state Department of Revenue.
Supporters say the program is a good investment, with 270 productions that have collectively spent more than $2.8 billion in the state to its credit.
Earlier this year, a state panel flagged the tax credit as one of several that lawmakers should consider modifying or repealing.
Christian M. Wade covers the Massachusetts Statehouse for The Salem News and its sister newspapers and websites. Email him at [email protected].